By Brenden Adriaanzen, National Manager, DG Capital
There are many avenues for getting something back from government whether it is from DTI, SARS or ITAC. In this piece, we are going to discuss import duties and the different ways in which to claim these in terms of the Customs & Excise Act. In simple terms, this is a what, how and when guide to Duty Recoveries.
The first item for discussion is drawback item 521: Any manufacturing entity can claim this if a raw material or component that is imported attracts import duty. The item must be used in the manufacturing process and be exported to countries other than BLNS countries. The importer is required to be registered as a manufacturer in terms of 521.00 with Customs, prior to manufactured goods being exported.
Next is drawback item 522. This is applicable to all importers where a raw material or component attracting duty is imported and exported, unaltered, to countries other than BLNS countries. An application to Customs must be made prior to the export as Customs is likely to impose certain conditions prior to the export shipment, e.g. requiring the export to be made under supervision. For high value items it could however be worth all the effort.
The last item for discussion is item 536 which is specific to the automotive industry. This item is applicable to dutiable component imports that will be used either in the manufacturing process or be warehoused for supply to an Original Equipment Manufacturer (Vehicle Manufacturer) for fitment on a production line.
Another important Customs consideration is to review your tariff determinations regularly, to ensure that all items are classified correctly. We often find clients relying on their freight forwarders to classify imports; however, the onus is on the company to ensure its compliance.
Of late, Customs has become more alert about classifications, and we are seeing more companies being penalised for incorrect classifications over a 2-year period.
DG Capital can assist you in determining the accuracy of Customs calculations, thereby often reducing penalties. We also review clients’ compliance regarding rebate / bond store administration and compliance around import and export processes.